LNG

Shell has again suspended production at the “Prelude” floating LNG facility offshore northwest Australia because of an electric trip, an issue that had previously led to long shutdowns for safety investigations.

Shell UK said it completed the restart of operations at the Pierce field in the UK Central North Sea after a significant upgrade project to allow natural gas to be produced after years of the field producing only oil.

The South Koreans have swooped to become the fourth customer signed up in foru weeks for Energy Transfer LP’s liquefied natural gas volumes from the Lake Charles LNG terminal on the US Gulf Coast being transformed into a liquefaction and export plant.

Shell plc, the now UK-based oil and gas major and leading liquefied natural supplier, reported fourth-quarter income of $11.5 billion compared with $4Bln of losses a year ago, while annual LNG sales dropped by 11 percent.

Tellurian Inc. has finalized yet another liquefied natural gas sale and purchase agreement with Royal Dutch Shell after two previous sealed deals with global commodities firms Gunvor and Vitol.

The Shell SPAs are on a free-on-board (FOB) basis at Driftwood LNG for a combination of 3 million tonnes per annum for a 10-year period, indexed with two indices, the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), each netted back for transportation charges.

The agreements mark the third deal that Tellurian has finalized in 10 weeks, totalling 9 MTPA and nearly all of the capacity of Driftwood LNG’s first two liquefaction Trains.

“Tellurian welcomes Shell to the Driftwood project,” said Tellurian President and Chief Executive Octávio Simões.

“Shell manages one of the largest and most diverse portfolios of LNG in the world,” he added.

Steve Hill, Executive Vice President of Shell Energy said the deal suited the Anglo-Dutch company as LNG demand was expected to nearly double by 2040.

“This deal secures additional competitive volumes for our portfolio by the mid-2020s, enabling us to continue providing diverse and flexible LNG supply to our customers. We look forward to working with Tellurian,” stated Hill.

The Houston, Texas-based company is moving ahead after signing firm deals in late May and early June 2021 with Gunvor and Vitol for a combined 6 MTPA from the Driftwood plant.

Each of the firm agreements is also for a period of 10 years with the supply indexed to the JKM and Dutch TTF.

Simões said that Tellurian would now focus on financing Driftwood to give US engineering contractor Bechtel notice to proceed with construction in early 2022.

The Driftwood project has permits for production capacity of around 27 MTPA. The plant will be sited on the west bank of the Calcasieu River, just south of Lake Charles.

Tellurian has also filed a formal application with the US Federal Energy Regulatory Commission to build a new 37-mile pipeline in Louisiana that will originate near Ragley in Beauregard Parish and end near Carlyss in Calcasieu Parish, close to where the Driftwood facility will be located.

Southern LNG Company, the operator of the Elba Island LNG export plant near Savannah in Georgia and a subsidiary of pipeline giant Kinder Morgan, is to host a full inspection of the facility by regulators just after the first anniversary of a fire at the new plant that delayed completion.

Royal Dutch Shell, with one of the largest global LNG sales portfolios, has warned investors to expect post-tax charges of between $3.5 billion and $4.5 billion in relation to impairments, asset restructuring and onerous gas contracts in the fourth-quarter earnings in February 2021.

June 30 (LNGJ) - Royal Dutch Shell said in an update to the second quarter 2020 outlook for its Integrated Gas division that production is expected to be between 880 and 910 thousand barrels of oil equivalent per day and LNG liquefaction volumes are expected to be between 8.1 million tonnes and 8.5 million tonnes.

   “Trading and optimisation results are expected to be below average,” said Shell. “As previously communicated, more than 90 percent of our term contracts for LNG sales in 2019 were oil price linked with a price-lag of typically 3-6 months. Consequently, the impact of lower oil prices on LNG margins became more prominent from June onwards,” it added.

Kinder Morgan, the US pipeline and terminals company, evacuated its Elba Island LNG export plant near Savannah in Georgia and its ongoing commissioning activities as Hurricane Dorian moved along the East Coast.